YouTube Networks: 7 Things You Need to KnowPosted September 2, 2012 by Freddie Wong in Blog

1. As a content creator, you have something these networks need. You have the power.

You have content. That content has likely already proven itself to a certain extent – you probably have built some audience, or have some viewership, or you are simply making really good work – and that’s what they need. Their entire business model of these networks relies on people like you to supply them with content, which in turn generates viewership. No views on their channels means no money. No money means no business. Your content represents, simply put, a business opportunity. Therefore, you need to treat your interactions with any network as a business.

They are not your friends. They will not look out for your interests if there’s no direct benefit to them. Anything they say that isn’t backed up in writing is meaningless.

We’ve had networks tell us that our exclusivity to them was something we could “back out of anytime we wanted to” and that they would “let us leave.” The contract says otherwise, and when push comes to shove, what’s on the page is what sticks.

At the same time, they’re not your enemies. There’s no need to be adversarial. They have a business to run and so do you. There is no need to be intimidated – remember: You have something they need.

They’ll help you so long as it helps them, so it’s good to structure your deal in a way that this is possible – you want them to want to help you. This usually means giving them a percentage of the business they bring you. This is win-win for everyone – for you, you’ll get more opportunities than you would have otherwise. You get to be associated with their (probably) more powerful brand. For them, since they only get paid when you get paid, it’s in their best interests to get out there and find work for you. This is a relationship that fully acknowledges that each party is self-interested and provides for that fairly. What percentage is fair? We’ll talk about that in a bit.

Never agree to a relationship where they are passively siphoning off your income if they’re not improving your prospects beyond what you normally have. Always weigh what you’re getting versus what you’re giving away, and make sure it’s fair. Granted, in some cases the benefit might be an immediate CPM bump from what you’re used to. Make sure you calculate exactly what that bump is – do the math. Is what they’re taking proportional to what they’re bringing you?

How do you know what’s fair? There aren’t any hard rules – what’s fair for someone in one situation may be ridiculous for another. Trust your gut.

2. Never sign the first draft of a contract. Lawyer up and change it up.

Here’s how a contract usually works. Party A drafts up what they believe is a fair contract and sends it to Party B. Party B makes changes to that contract and sends it back. Party A makes further changes. They go back and forth until they arrive at a contract that both parties agree on.

The receipt of a contract is the beginning of a negotiation. You have every right in the world to want things changed, and you must communicate those changes by altering the contract and sending it back.

I’ve seen a lot of the contracts they hand people right off the bat and frankly they are absurd. They should not be signed under any circumstances. These companies have legal teams or lawyers on retainer. These lawyers are paid very well to ensure their client gets the best possible deal at all times. Unless you have some background in entertainment law, you are not equipped to fight these guys.

Your first step is to read and re-read the contract until you get a grasp of it. Your next step is to find an entertainment lawyer, pay them their fee, and have them review the contract with you point-by-point to make sure you absolutely understand what’s going on. This lawyer will likely suggest and notate changes, and you should have some changes of your own. You should also have questions ready (many of which probably begin with the phrase “What if I…” or “Would this contract allow me to…”)

If you’re considering joining a network, you’re taking things seriously. Whatever fee you pay that lawyer will be well worth it.

You don’t need to call the network and ask them questions about their contract. They’re under no obligation to warn you of any caveats, and based on our off-the-record conversations with some of these networks, they may straight up lie to your face about what you’re signing. Remember – your lawyer (who you are paying) is the only person you can really trust.

Incidentally, make sure you outline out exactly what you’re looking for with any prospective lawyer and get a sense of how much it’ll cost. Remember – this is pretty basic contract/entertainment law – this isn’t negotiating out the director fees for The Avengers and you don’t need the world’s top lawyers on the case.

I have heard of people afraid to challenge the contract because they fear the network will pass them up and they’ll lose out on an opportunity. Remember Rule #1 – you have what they need.